What Even Is Trump’s China Strategy?

In the early days of his second term, President Trump seemed to be intrigued with the idea of meeting Xi Jinping and hammering out a trade agreement, if not a broader deal. China also seemed interested, most likely as a way to forestall further tariff hikes and other U.S. measures, and to buy time. “Liberation Day” announcements have thrown a monkey wrench into this dance, with an additional 34 percentage point tariff aimed at China, adding to the 20 percent applied earlier this year. With the tariff hikes, the U.S. average tariff rate towards China has climbed to a whopping 76.1 percent. In addition, the Trump team has tightened export controls against specified Chinese companies, revoked the small shipment de minimis exception for Chinese suppliers, issued a policy calling for stricter rules on inbound and outbound investment, and cited Chinese violations of its commitments under the Phase One trade agreement.

Not missing a beat, Beijing responded with its own strong package of retaliation. Notably, it mirrored the U.S. tariff rate increase, but unlike Washington’s did not provide product exclusions. Furthermore, Chinese officials went beyond raising tariffs by introducing additional export restrictions on rare-earth minerals, placing more U.S. companies on its unreliable entities and export control lists, launching a new antidumping investigation against a U.S. company, and commencing WTO dispute settlement proceedings against the U.S. These measures come on top of earlier retaliation from Beijing that included applying 15 percent tariffs on U.S. farm exports, suspending imports of U.S. lumber, and launching an anti-circumvention investigation into fiber optic imports.

In line with his intolerance for partners who choose to retaliate, President Trump has threatened an additional 50 percentage point tariff increase if Beijing doesn’t turn off its retaliation. If he goes ahead with this latest threat, almost all U.S. tariffs on Chinese imports would enter the “prohibitive” zone where tariffs are so high that trade flows dry up.

While these tit-for-tat actions lower significantly the prospects for a U.S. -China trade negotiation, they don’t necessarily preclude one, particularly if both leaders for their own reasons want to move forward—Trump to add to his legacy of being the best dealmaker ever, even against heavy odds, and Xi to buy China more time to strengthen its domestic economy, turbocharge its strategic industries, and keep U.S. businesses engaged in its market.

Announcing the start of talks, which in no way is a given, would be the relatively easy part. Hammering out a meaningful agreement and one that will be adhered to and enforceable will give the word “challenging” a new meaning.

U.S. negotiating requests would likely include Chinese commitments to buy more U.S. agriculture, energy, and other products; strengthen the Phase One agreement rules on IPR, currency, agriculture standards, and tech transfer; and discipline the use of subsidies and the activities of SOEs. Moreover, for an agreement to pass the red face test it would need to include provisions to curtail the export of Chinese manufacturing excess capacity to the U.S. at artificially low prices, as well as regulate the activities of Chinese firms operating in third countries to ensure that they are not circumventing U.S. tariffs and other restrictions.

China will have its own list of demands. Beijing would likely push for the removal, or at least a standstill, on technology export controls; reduction or removal of recent tariff hikes; a tariff “moratorium” shielding exporters from further Trump tariff hikes; relaxing of restrictions on inbound and outbound investment; reinstating the de minimis exception for Chinese small shipments; and favorable outcomes to the United States Trade Representative’s Section 301 investigation into Chinese unfair shipbuilding practices, as well as the pending sale of TikTok.

The ability and political will of each side to move on the other’s list of demands is remote, meaning that unlike the Phase One talks, a victory this time around may not be in the cards. Of course, President Trump could be tempted to take a mediocre deal and label it as “the best deal ever.” Whether such an assessment would stick this time around remains to be seen.

President Trump does not have a policy on China so much as a prism through which he views the relationship. His lens is one of maximizing tangible benefits to the United States, particularly in trade, rather than engaging in the ideology-fueled competition for global leadership that defined the approach of his recent predecessors.

While this is a transactional—and in theory, pragmatic—approach to China, it does not make the relationship easy for Beijing to navigate. First, Trump’s strong affinity for tariffs—as a tool to protect U.S. industry, generate government revenue, and extract concessions on a range of issues—creates a high bar for achieving a “grand bargain” with Beijing that would offer major relief from his punishing tariffs.

Another challenge is Trump’s personalistic “Mar-a-Lago” style of diplomacy, which is layered on top of a Washington establishment that views China as an economic, military, and ideological adversary. When Trump is motivated—such as when pursuing a deal—he has been willing to limit or even reverse provocative measures advocated by the foreign policy establishment. One example from his first term is his reversal of a crippling ban on sales of U.S. technology to Chinese telecom firm ZTE. But much of the time, Trump lacks the incentive or focus to restrain the so-called foreign policy “blob,” leaving China hawks in D.C. free to act.

So, what does all this mean for U.S.-China relations in a second Trump term? Trump’s mercurial nature makes predictions difficult, and there are several wild cards in his second term. His dominance of the Republican Party—and the GOP’s current control of Congress—gives him considerable political leeway to explore compromises with China. His administration includes officials, such as Vice President JD Vance, who advocate a narrower set of U.S. foreign policy goals—an approach many in Beijing may welcome. These dynamics keep open the possibility of a broad U.S.-China agreement on trade and other issues, especially if Trump feels pressure to calm domestic economic jitters.

A sweeping “grand bargain,” however, is likely to remain elusive. China would likely need to make deep—and possibly unacceptable—trade concessions to secure major tariff relief. Beijing is unlikely to consider such concessions without credible assurances that Trump will honor his commitments and that the U.S. will be sensitive to Chinese concerns, particularly over Taiwan. That’s a tall order, and would require Trump to consistently restrain aggressive measures from both Congress and his own administration. Even then, Beijing may hesitate to make major commitments, knowing Trump’s time in office is limited.

More likely than a grand bargain are one or more smaller deals that offer modest tariff relief in exchange for cooperation on issues such as fentanyl trafficking or U.S. corporate control over TikTok. And because a grand bargain is unlikely, Trump will have less reason to consistently keep the China hawks in check. As a result, pressure for U.S.-China decoupling in trade, investment, technology, and people-to-people ties will persist.

Looking for a consistent “China strategy” under Trump 2.0 may well be what a Chinese idiom calls, climbing a tree to look for a fish: It assumes a level of coherence and institutional continuity that simply doesn’t apply. Trump’s approach isn’t built on strategy in the conventional sense.

Trump doesn’t view Xi Jinping merely as a rival—nor is he exactly an admirer. He sees a peer: a fellow strongman who consolidates power, bends institutions, and plays hardball on the global stage. This model of muscular, unfiltered, results-oriented patriotism has become central to Trump’s political worldview.

Trump has approached his second presidency through that lens, and China policy is no exception. Trump 2.0 reasserts the primacy of “America First,” sharpened by a sweeping domestic overhaul. From gutting bureaucracies to defunding foreign aid and freezing multilateral cooperation, Trump is reshaping the state itself—more aggressive, less beholden to liberal internationalism. In this framework, China is not merely a rival but a fulcrum: a convenient antagonist for domestic mobilization, a pressure point for trade renegotiation, and—ironically—a potential partner in redrawing the rules of global order (by say, leveraging China to broker a “peace deal” favorable to Russia).

In this new phase, Trump has elevated economic statecraft and made it his primary weapon. Trade policy is no longer about correcting imbalances through rules. Instead, it’s punitive, transactional, and aimed at domination. The return of sweeping tariffs—not just on Chinese goods but on those produced by allies, too—signals a broader use of market access as leverage across multiple fronts.

Still, the economic offensive is paired with vagueness. Trump has delayed key enforcement actions—like the TikTok ban—and left open the door to deals. This is vintage Trump: keep adversaries off balance, project the image of strength, and preserve room to pivot if the price is right. That flexibility is crucial, especially as Beijing signals openness to trade and investment negotiations, under pressure to quiet external tensions amid economic headwinds.

Could there be a Trump-Xi deal? Absolutely—more likely than many assume. But Trump doesn’t pursue deals for long-term strategic goals; he wants political trophies. Any agreement must yield tangible U.S. wins and symbolic wins for Trump himself: fentanyl enforcement promises, splashy purchase commitments, and/or Chinese investment in U.S. manufacturing.

Xi, too, needs optics. But unlike Trump, he controls the domestic narrative and faces no meaningful political opponents. He’s unlikely to hand Trump a political win without securing something valuable in return—but that’s not likely to be a major problem for him.

All eyes are on trade war 2.0 and tech decoupling, but Trump’s China policy is less about China and more about Trump’s vision of power. Paradoxically, the absence of rigid ideology—combined with Trump’s grip on domestic institutions—could produce surprising openings.

Trump often touts his personal rapport with Xi. That chemistry may not drive policy, but it could grease the wheels if the politics align. In a world where institutions are sidelined in favor of personality-driven diplomacy, that mutual recognition may matter more than most analysts think.

Anticipating Donald Trump’s behavior is an unrewarding activity, and predicting the future of U.S.-China relations is a high-risk affair. It is, however, noteworthy that, so far at least, the public remarks Trump and his close associates have made about China have been less unpleasant than those deployed against countries that have been long-term allies.

Speculation about the U.S. administration’s intentions towards China range from the reverse Kissinger—widely dismissed in Europe as vanishingly unlikely—to the division of the globe into spheres of influence dominated by respective big powers—the Americas for the U.S., Asia for China. Whatever China policy does eventually emerge from the White House, it is unlikely to be one that can count on the support of regional or transatlantic allies for its execution as U.S. policy has in the past.

Trump and JD Vance have berated Europe for a series of perceived political and moral failures, and Elon Musk has unashamedly sought to influence European politics in favor of the far right, interventions that so enraged the Chancellor-elect of Germany Friedrich Merz —a lifelong Atlanticist—that he questioned the future of NATO and the European Union’s relationship with the U.S.A. For the EU, China’s second biggest trade partner, the era of the transatlantic alliance is ending. For Beijing, which has frequently urged Europe to seek “strategic autonomy” from Washington, it was an effortless win.

Trump has hit Japan, South Korea, and Vietnam, along with all the other highly trade-dependent members of ASEAN, collectively China’s biggest trade partners, with potentially crippling tariffs. He has accused Taiwan of stealing U.S. technology and failing to pay enough for U.S. security. He has slapped a 10 percent tariff on Australia, a country that has a long and close security relationship and runs a trade deficit with the United States, despite the personal pleas of the prime minister Anthony Albanese for an exemption.

Mr. Albanese was not simply asking for a favor from a close ally: falling as they have in the middle of a hard-fought Australian election campaign, the tariffs have called into question the future of the AUKUS agreement—the tripartite agreement between the U.K., the U.S., and Australia to align defense industries and to equip Australia with nuclear submarines. It was an agreement reached in 2021 with the defense of the Indo-Pacific against the Chinese threat very much in mind, but Trump’s actions have strengthened the position of those in Australia, including former prime minister Paul Keating, who are critical of AUKUS and want Australia to seek closer relations with China.

As the PRC’s war games around Taiwan grow more frequent and aggressive, it seems increasingly uncertain that the U.S. would come to Taiwan’s defense if those military exercises became more sinister. Even without the risk of war, the effects of the administration’s actions have so far been to China’s advantage. Countries hit by U.S. tariffs are unlikely to want or to be able to pick a fight with China, or to join one should the U.S. choose to do so. Chinese Foreign Minister Wang Yi has urged the European Union to drop its tariffs on Chinese EVs as an important step to restoring warm relations. That is unlikely to happen in the short term, but it is not only in Europe that many have reluctantly concluded that, for now at least, China looks like a more reliable partner than the U.S.

After a bruising and volatile week on the global trade front, Donald Trump’s current China policy can be summed up in one word: tariffs.

Levies on imports from China, not to mention a slew of other countries, are clearly Donald Trump’s weapon of choice to build leverage in the U.S.-China relationship. But to what end is still unknowable—and likely unknown even by Trump himself.

In the run-up to his election in November 2024, my standard line about Trump’s likely China policy was that only two things were certain:

• Tariffs would rise.

• The dispersion of potential outcomes for the U.S.-China relationship would be much wider than under a Democratic president—or indeed any other president.

Both of these certainties remain in place, with large tariffs on China already a reality and a plethora of potential outcomes still possible.

For now, it looks like the Trump Administration’s China policy will remain captive to the tariff saga, as the president prioritizes his efforts to reshape the global trading order.

As such, any more strategic focus from the U.S. toward China—in the realms of export controls, wider tech competition, the Taiwan issue, or some sort of grand bargain—will be on the back burner.

Fortunately, this means that an eventual stabilization, or even modest improvement, in U.S.-China relations are still on the table. However, any potential efforts toward realizing such an outcome remain months, if not years, away.

Likewise, both more aggressive tactical and strategic moves by the U.S. to contain or counter China economically or technologically—particularly by the more traditionally hawkish members of Trump’s cabinet—will also be in a holding pattern for a while yet.

Add to this dynamic the fact that neither Xi Jinping nor Donald Trump appears particularly eager to begin a substantive dialogue—an attitude that has filtered down to largely stymie working-level talks as well—and the general stasis characterizing U.S. policy toward China is further set to solidify.

On China’s part, leaders in Beijing are set to continue their course of quietly building out their own toolkit for economic coercion, while seeking to make progress in improving relations with U.S. allies put off by the Trump Administration’s trade actions.

Xi Jinping is unlikely to proactively pursue aggressive actions against the new U.S. administration for now, preferring instead to stay in a largely reactive stance, while biding time to see if and when Trump begins to pursue a clearer policy agenda toward China.

For now, then, tariffs and counter-tariffs will remain the driving force shaping U.S.-China relations.

President Trump does not have a China strategy. He has a strategy of power, to which all other goals are subordinate. The live question is whether the China hawks in his administration will succeed in channeling his will to power into a full-on decoupling.

Trump’s central aim is to maximize the power of the United States, and of himself personally—not necessarily in that order. His major actions in his first two months in office are all efforts to dismantle the obstacles to his exercise of power. At home, he has sought to destroy the ability of federal bureaucrats, the legal profession, and universities to oppose him. Abroad, he unleashed an unprecedented trade war, announcing arbitrary tariffs of 25 percent or more on dozens of countries, without any economic justification.

The purpose of the trade war is to demolish the cooperative international economic system of the past 80 years and replace it with one in which the U.S. has the unconstrained ability to force other countries to do what it wants, under threat of losing access to the American market. Tariffs are Trump’s preferred tool both because he believes that market access is the U.S.’s best source of leverage, and because current U.S. law sets no limits on his personal ability to levy any tariff on any country for any reason.

The most benign possible interpretation of Trump’s all-fronts power play is that he simply wants to display dominance and extract statements of submission. Once the needed kowtows have been made, business can proceed more or less as before. This was roughly how Trump operated in his first term. And it might explain the extraordinary reversal of April 9, when Trump abruptly paused virtually all his “reciprocal” tariffs except those on China, on the grounds that China had disrespected him by retaliating, whereas other countries had not.

The better explanation of that move, however, is that Trump and his advisors realized that his April 2 tariff barrage would soon lead to economic catastrophe. China’s retaliation provided the pretext for a face-saving retreat on most fronts, while leaving the trade war on China in place. Administration apologists jumped to claim that targeting China was the master plan all along, but this is certainly false.

The net outcome is that the world trading system is still hostage to authoritarian caprice, since most countries still face the possibility of high tariffs in 90 days if they do not capitulate to whatever demands Trump makes of them. Meanwhile China, thanks in part to its own rashness in rising to Trump’s bait, faces the risk of being totally cut off from direct access to the U.S. market. For the economic and national security hawks in Trump’s administration, this may be a desirable prelude to “strategic decoupling.” It is far from clear that this is what Trump himself wants: as recently as mid-March he was touting the possibility of a summit meeting with Xi Jinping. Clarity on what Trump and his team really want from the China relationship is still far off.